Reserve Bank of India has asked banks to work towards putting a stop to circulation of soiled notes in the economy. Those bank branches which deal with huge number of currency notes have been asked to put up note sorting machines by the upcoming month for this purpose.

"The Reserve Bank is committed to a 'clean note' policy. RBI exchanges soiled notes for clean ones, and mutilated notes for new ones subject to certain conditions," central bank Governor D Subbarao said.

"In pursuit of our clean note policy and to check counterfeiting, we also prescribed that by March 31, 2011, all bank branches with cash receipts of over Rs 50 lakh per day be equipped with a note sorting machine so that every high denomination currency note is checked for fitness and genuineness before being put back in circulation," he said.

Also, banks have been directed to check the notes being put in ATM for cleanliness and authenticity.

"We are a large cash economy; in fact, we are the second largest producer and consumer of currency in the world, next only to China. Producing such a large amount of currency is expensive," he said.

Speaking about the inception of plastic currency in the country, he said that, "We are planning to try this out on a pilot basis, starting with a plastic note in the Rs 10 denomination, which we will distribute out of five of our regional offices in the country including our Bhubaneswar office."

"If the pilot proves successful, we will mainstream the use of plastic currency," he said.